LIPA to vote on $740M wind farm project off Rhode Island

A 15-turbine offshore wind farm would connect to Long Island via a 50-mile undersea power cable from its location off the Rhode Island coast. Above, the first turbine installed in August at the Block Island Wind Farm off Rhode Island. Photo Credit: Deepwater Wind

A 15-turbine offshore wind farm that LIPA trustees will vote on Wednesday has a $740 million price tag and would connect to Long Island via a 50-mile undersea power cable from its location off the Rhode Island coast.

LIPA trustees will vote to authorize the authority’s chief executive to execute a 20-year contract to buy all the energy and other green-energy benefits from the project developer, Deepwater Wind South Fork, according to LIPA documents. If completed, it would be the largest such agreement for an offshore farm in U.S. waters, though other, larger projects from Maryland to Massachusetts are fast on LIPA’s heels. LIPA can request a five-year extension of the contract at a “discounted price,” according to the LIPA documents.

The project is expected to be in service by Dec. 1, 2022, and provide enough energy to help alleviate a looming power shortage on the South Fork, LIPA and its system operator, PSEG Long Island, have said. The 15 turbines would each be rated at 6 megawatts, or 90 megawatts in total, but grid limitations on the South Fork could limit the hourly maximum to 75 megawatts, according to the documents, although they say further studies are needed to confirm that figure.

Deepwater spokeswoman Meaghan Wims in an email confirmed that the project has a $740 million price tag, a figure that hasn’t previously been disclosed. The price, which includes construction, studies, financing and other costs, will be paid by Deepwater, but ultimately reflected in the cost of energy to LIPA customers. Utilities generally pay a premium for green energy, often more than double the price of energy from traditional power plants.

LIPA has previously said the wind farm and other South Fork grid enhancements will cost average residential customers around $3.67 a month when all the projects are completed by 2026. Among the other enhancements are large batteries, temporary generators and a $513 million grid-upgrade project for the South Fork.

Deepwater last year completed the nation’s first offshore wind farm in waters off Block Island, a five-turbine array that can produce up to 30 megawatts of energy. Deepwater has proposed another 210-megawatt project for LIPA that is currently under consideration. A megawatt of wind energy can power around 320 homes, according to the American Wind Energy Association.

The contract with Deepwater would allow LIPA to “prepay” a portion of the energy payments “in a lump sum” in a move the authority said could reduce overall financing costs. LIPA would issue new bonds to borrow money for the prepayment. No cost figure is given in LIPA documents for that option.

Environmental groups have been pressing LIPA for years to develop offshore wind energy, saying it’s needed to jump-start a nascent U.S. market. Commercial fishing groups largely have opposed them, saying they reduce access to vital fishing grounds and can damage the sea bottom.